Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Creative Labs (CREAF) -- Ignore unavailable to you. Want to Upgrade?

To: DD™ who wrote (4887)	10/24/1997
From: CHIP HUNTER	Read Replies (5) \| Respond to of 13925

Hong Kong market is up about 6 1/2% but CREAF is only up 3 1/2%...Why is CREAF lagging the market so badly??

To: DD™ who wrote (4887)	10/24/1997 12:01:00 AM
From: Dennis G.	Respond to of 13925

Thursday October 23 10:30 PM EDT Hong Kong dlr peg to weather the storm-US experts By Jeff Coelho NEW YORK, Oct 23 (Reuters) - Despite renewed pressure on its currency Thursday, Hong Kong appeared unlikely to abolish its U.S. dollar peg system anytime soon, U.S. experts said. ''I don't think the Hong Kong (peg) is going to break up. (Hong Kong officials) have made up their mind that they do not want the Hong Kong dollar peg to be dismantled,'' said Ashok Chabria, senior dealer at Australia and New Zealand Banking Group in New York. Chabria said China or Hong Kong would intervene with their massive foreign exchange reserves if problems persisted. ''When you put Hong Kong and China together, you have huge reserves,'' he said. Hong Kong's foreign exchange reserves were about $88 billion, while China's reserves neared $121 billion. The Hong Kong dollar came under pressure as the currency instability that had hit much of Asia spilled into Hong Kong, widely regarded as one of the region's strongest economies. The currency fell as low as 7.7495 per U.S. dollar, and in mid-afternoon New York trade lingered near 7.7450. A surge in interest rates supported by Hong Kong officials in an effort to fight off currency speculators exacerbated the territory's equity-market jitters. The Hang Seng stock index plummeted 10.4 percent on Thursday, closing at 10,426.30. And other Asian stock markets followed suit. Hong Kong overnight rates ballooned to 200 percent by Thursday's close from around six percent on Wednesday, and many banks raised their primes 0.75 point to 9.5 percent. Some U.S. experts had anticipated Hong Kong's financial market woes. Rudiger Dornbusch, professor of economics at the Massachusetts Institute of Technology, said on Wednesday that Southeast Asian woes might weigh on the Hong Kong stock market, but he did not believe the instability would force the Hong Kong dollar off its peg to the U.S. dollar. ''I don't believe the Hong Kong dollar will go. But I do believe there is a state of siege and the higher the interest rates, the worse the pressure on the stock market,'' he said. Nevertheless, market talk in Europe suggested central bankers there expected an imminent devaluation of the Hong Kong dollar, and possibly even a dismantling of the peg. But U.S. financial market experts said that scenario appeared unlikely in the near term. Robert Hormats, vice chairman of Goldman, Sachs and Co International, said China would be extremely reluctant to allow devaluation of the Hong Kong currency. ''They will retain the value of the currency. They will not devalue it,'' he said. However, Hormats acknowledged that the options to support the currency were limited, requiring either higher interest rates to hold the currency to its peg or the use of foreign exchange reserves to intervene. At some point, Hormats said, China may consider pegging the Hong Kong dollar to its own currency. ''But I don't think it is going to happen any time soon,'' he said. Nevertheless, experts said the Hong Kong unit was likely to weather the storm because of the territory's dynamic economy. Hok Law, chief investment officer for global fixed income at Chancellor LGT Asset Management, said Hong Kong had a far more ''flexible economy'' than its Asian neighbors. ''The economy, because of its openness, has always adjusted rapidly and has always bounced back (after a crisis),'' he added.